Solar: Japan Fundamentals Strong, China Outlook Mixed, Says Deutsche

By Shuli Ren

This year, solar demand in Japan is strong but China’s outlook is more cloudy, according to Deutsche Bank analysts Vishal Shah, Jerimiah Booream-Phelps and Susie Min:

Checks with industry contacts suggest upside to our Japanese shipment expectations of 7GW in 2014 and some risks to consensus Chinese market expectations of 14GW due to policy uncertainty during the course of 2014.

In Japan:

Japanese Market Continues to Remain Strong Ahead of April FiT Cuts Conversations with industry contacts indicate all sorts of shortages (from construction workers to available trucks to ship modules on site) are developing ahead of the April FiT cut.

In China:

Checks indicate that the Chinese govt wants to encourage more DG in Eastern China and implementation of 8GW DG target in China likely remains challenging.

As Chinese solar companies’ earnings season kicks off in early March, Deutsche Bank expects:

Chinese companies to remain relatively upbeat during the upcoming earnings season and highlight strong Q1 shipment trends along with relatively stable margin outlook. However, policy uncertainty in the US and China could remain a near term overhang for Chinese solar stocks.

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Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. Barrons.com’s Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools. She studies multiple languages and photography.